How China Wins the Economic Long Game

by New Rules [9-11-2025].

(RAD: It keeps becoming more & more clear that the Trump administration really doesn't understand China, which leads to mistakes that are hurting the US economy & living conditions. — RAD)

In an era of increasing economic warfare, China has developed a sophisticated and effective system to deter economic coercion from third parties. This is about resilience and strategic positioning.

China's strategy isn't one-dimensional. It's a multi-layered shield combining three powerful approaches:

🔸Denial: Making attacks futile.

🔸Entanglement: Making attacks too costly.

🔸Punishment: Promising a firm response.

Credibility is the foundation of all three.

Look at the playbook

1️ Deterrence by Denial: Building Resilience.

China focuses on minimizing vulnerabilities. This involves securing critical supply chains, advancing self-reliance in key technologies (like semiconductors), and diversifying production geographically into its hinterland.

THE GOAL:

To signal to any potential adversary that an economic attack will not achieve its desired objectives due to China's strong internal economic foundations and capacity to withstand external shocks.

2️ Deterrence by Entanglement: Strategic Interdependence.

As a global manufacturing and supply chain hub, China is deeply integrated into the world economy. This creates mutual dependencies that make economic aggression costly for the attacker as well.

3️ Deterrence by Punishment: A Credible Toolbox.

China has demonstrated a clear willingness to impose calibrated costs in response to perceived economic attacks. The key here is credibility, built through a track record of measured responses.

Examples include the swift implementation of export controls on Rare Earth Elements during recent trade escalations.

This demonstrated China's ability and will to leverage its strategic advantages promptly and effectively when necessary.

Conclusion:

China's approach is a masterclass in comprehensive national power. It moves beyond isolation to smart integration, building resilience from within while leveraging global interconnectedness to ensure stability and deter coercion.